Read the article below to find out what you should look for when choosing a CDC to work with on your SBA 504 loan

When looking for a Certified Development Company, or CDC, to help finance an SBA 504 loan, there are a few key things to look for.

The first is certification from the SBA. This indicates that the CDC has been approved by the government to offer SBA 504 loans.

The second is experience. A CDC with a lot of experience in financing small businesses will be more likely to understand your business and provide you with the best loan terms possible.

Finally, it's important to compare rates and fees between different CDCs. This will help you find the best deal on your SBA 504 loan.

The majority of non-SBA loans (i.e., “conventional”) merely require you to choose a lender. With an SBA 504 loan, however, such is not the case. In this case, you will need to decide which CDC you will deal with. That holds true whether you choose to work with your own lender or not, but it holds true even more so for business owners who wish to speed up the process by working with a lender who already has a relationship with the CDC. Therefore, how do you pick a CDC? Why is it important the one you pick? Let's look more closely.

Why does your choice of CDC matter?

The Small Business Administration (SBA) offers a number of loan programs for small businesses. One such program is the SBA 504 loan program. This program is offered through certified development companies (CDC), which are lenders approved by the SBA to offer this type of loan. So, why does your choice of CDC matter?

First, the CDCs are the only lenders who can offer the SBA 504 loan. This means that if you want to take advantage of this loan program, you must go through a CDC. Second, the quality of service and support you receive from a CDC can vary greatly. It's important to do your research and choose a CDC that will be there for you throughout the entire process – from pre-application all the way through to post-closing.

Finally, choosing a good CDC can help you secure funding for your small business.

Let's start by talking about why your decision is important. Despite the fact that there are over 250 separate CDCs now operating in the US, they greatly differ from one another. They must all adhere to SBA guidelines in order to be approved, but that does not imply that they are all the same. They can differ in a variety of ways. What should you therefore look for?

Considerations for choosing a CDC

When choosing a CDC, you should take a number of factors into account. These are a few of them:

• Location: The CDC's location is one of the first things to take into account. Most of the time, CDCs have the right to work with companies in the state where they were founded, but it does not necessarily indicate that they are close by. Due to the stated local emphasis CDCs are meant to have when issuing SBA 504 loans, this is especially crucial. Better, the CDC should be more regional. But occasionally, since some states only have one or two, you might only have access to a small number of CDCs. Use this link to use the SBA's search by state tool to discover all of your possibilities. You may get the name, address, phone number, and website link for each CDC in your state by selecting it from the dropdown menu.
• Arrangements with Lenders: The current relationships the CDC has with its lenders are an additional crucial factor. Again, a fresh lender/CDC relationship can be built, but working with a couple that already has a relationship is typically easier. They can ease misunderstandings and speed up the loan application procedure.
• Efficiency: Efficiency in CDCs is tough to measure, but it typically boils down to how quickly the loan is handled and how well the CDC (and the bank) can handle any problems that come up during the lending process. This includes how quickly the CDC can respond to inquiries from the SBA's loan processing headquarters in Sacramento, California. It should be noted that although loan servicing may sometimes take place through the Fresno, CA, or Little Rock, AR offices, all SBA 504 loans are processed through the Sacramento office. Efficiency also pertains to how quickly a CDC can resolve issues that arise during the underwriting procedure.
• Responsiveness: Throughout the loan application and underwriting process, you will have questions and worries. That makes sense. Whether over the phone or in person, it is impossible to foresee every query you or your lender may have during the initial meeting. Due to this, you must ensure that the CDC you select is available for communication when necessary.
• Experience: The CDC's history is a crucial factor to take into account while choosing one. While there is nothing necessarily wrong with selecting a freshly established CDC, a more established company will have a great deal more expertise managing SBA 504 loans and will be better able to meet your specific needs. Additionally, more established, seasoned CDCs are more likely to have connections with lenders, further streamlining the procedure for you.

As always, if you’re having trouble finding a competent CDC to work with, consult with a qualified commercial loan broker for guidance.

You can read more about CDCs here: